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Senior-citizen discount
IN 2010 our legislature enacted the Expanded Senior Citizens Act of 2010, which amended
the Senior Citizens Act of 2003.
To implement the tax privilege provision of the law, the Department of Finance issued
Revenue Regulations (RR) 7-2010, later amended by RR 8-2010. Despite the issuance of
these regulations and the guidelines issued by the Department of Social Welfare and
Development, there are still issues and difficulties related to its implementation, which
sometimes results to denial or improperly availing of the benefit.
To further clarify these tax privileges as provided in the law and as implemented by RR 72010 and 8-2010, the Bureau of Internal Revenue issued RMC 38-2012. One of the areas
that the circular sought to clarify is how senior citizens can properly avail themselves of the
20-percent discount on certain purchases.
The discount, as well as the value- added tax (VAT) exemption, is for the exclusive benefit of
the senior citizen. Non-eligible individuals cannot ride with the privileges. Thus, if a group
consisting of senior citizens and non-senior citizens eat in a restaurant, only the shares of
the senior citizen shall be entitled to the discount and VAT exemption. To get the share of
the senior citizen, the total billing, exclusive of the VAT, shall be divided equally to the
number in the group. But this applies only if no individualized food item can be ordered or if
the transaction with the senior citizen is not processed separately. Thus, the circular also
recommends that the purchase of the senior citizen be processed separately as independent
transaction to ensure that it is for his exclusive enjoyment.
The circular also clarifies that the discount is available to all other consumable items served
by the establishments offered for the consumption of the general public. These include
condiments and side products offered by restaurants. But for set meals purchased by the
senior citizens, the discount shall be limited to a single-serving meal with beverage. The said
discount shall apply to dine, take-out and take-home order as long as it is the senior citizen
who is present and personally ordering with senior citizen ID card. Nevertheless, meals
primarily prepared and intentionally marketed for children and not for senior citizens
personal consumption are not entitled to 20-percent discount.

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Likewise, food ordered through the telephone for delivery orders are entitled to 20-percent
discount and VAT exemption provided the senior citizen ID card number must be given while
making the order over the telephone and must be presented upon delivery to verify the
identity of the senior citizen and subject to the proportionate discount depending on the
number of senior citizens involved. The delivery charge for delivery orders is subject to the
discount and exemption if not billed separately, otherwise it is not entitled to the discount and
exemption. Also, there must be no fixed maximum or cap that limits the discount below the
rate of 20 percent.
How about if a senior citizen visits bar or clubs to order alcoholic beverages and cigarettes?
For alcoholic beverages, if served as a single serving drink, the purchase of a senior citizen
is entitled to the discount and exemption. However, the discount is not allowed to purchases
in bulk, in buckets or in cases. For cigars and cigarettes, the discount and exemption
does not apply in the sense that these are not considered essential goods and are
hazardous to the health of the senior citizens, as the objective of the law and regulations is
to promote the health and benefits of the senior citizens.
There are also cases when a senior citizen may happen to purchase goods and services
that are on promotional discount. The senior citizen shall avail himself only either the
promotional discount or the 20-percent discount, whichever is higher, provided the discount
must not be less than the 20- percent discount.
Further, the term fares and toll must be distinguished. Fares are subject to 20-percent
discount and exemption while the toll is not. Thus, driving senior citizens paying toll are not
entitled to the discount and exemption, while senior citizens riding in public utility vehicles
are entitled to avail the same.
At any rate, the burden for the efficient implementation of Republic Act 9994 is on the part of
the establishment, store or the restaurant where the senior citizens purchase goods and
services. It is their duty to familiarize themselves with the law and the regulations and in
explaining to their customersthe senior citizensthe rules in availing the discount and
exemption.
****
The author is a junior associate of Du-Baladad and Associates Law Offices (BDB Law), a
member-firm of World Tax Services (WTS) Alliance.
The article is for general information only and is not intended, nor should be construed as a
substitute for tax, legal or financial advice on any specific matter. Applicability of this article
to any actual or particular tax or legal issue should be supported therefore by a professional
study or advice. If you have any comments or questions concerning the article, you may email the author at cherry.balanquit@bdblaw.com.ph or call 403-2001 local 313.

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